learn more about EW Forecasts

ELLIOTT WAVE ANALYSIS - Latest Market Commentary

Stock Indices

One-by-one, global stock markets are confirming the upside completion of five wave impulse trends that began from the dual lows of June ’12 and Nov.’12. Late last year, two Asian indices formed important highs – the Hang Seng and Nikkei 225 – in more recent weeks, the small-cap Russell 2000 traded in the U.S. has confirmed its completion earlier this month. The latest indices to confirm a high were only confirmed in trading during last Friday’s session – that is, the Eurostoxx 50 and Xetra Dax indices. The only remaining question is whether our benchmark S&P 500 has also completed its uptrend as intermediate wave (3), or as an alternate short-term count allows, extends towards 2014.12-2044.04? The most important event during last Friday’s trading occurred when the Eurostoxx 50 briefly exceeded its previous week’s low of 3132.87. This neutralised the three price-swing decline that had unfolded as a counter-trend zig zag pattern from the June high – instead, this is replaced by a 1-2-1-2 bearish sequence but with another 2nd wave rally currently unfolding as an expanding flat pattern. This translates into a short-term upswing during the coming week but limited below the recent highs. ###This same configuration can also be superimposed into the Xetra Dax. Our bearish stance for European indices leaves only the S&P 500 as the outperforming index with the potential to trade into one final higher high synchronising its action with the counter-trend upswing for European indices. But even this is not assured. European indices are expected to trade higher by approx. +2.2% during the coming week so this does translate into the S&P for an attempt towards 2004.00+/-. Either way, we can now confirm the limited upside potential for global indices prior to a sustained 2- or 3-month counter-trend decline getting underway and with downside projections during this period of -15/-20%. 21st July 2014

Financial Updates Currencies

Currencies (FX)

The US$ index is currently approaching short-term overhead resistance at 8074. This level is insofar important as it is derived by a fib. 61.8% extension of the initial upswing earlier this month and thus delimits the upside potential for a typical single zig zag sequence. If the US$ stalls in the proximity of this level, it would support the idea that the upswing from 7974 is unfolding into a counter-trend correction and thus advocate additional downside. The outlook so far however does not support this assumption and instead implies an imminent upside acceleration. The May-June advance is labelled as the 1st wave within an ongoing five wave expanding-impulse pattern that is forecast towards ultimate upside at 8885+/- in the months ahead. The 3rd wave should just about enter its 3rd wave acceleration – thus, a swift continuation higher is assigned a high probability. This is reinforced by the Euro/US$’s scenario: downside momentum is picking up which suggests the Euro has already entered its 3rd wave within the five wave decline from 1.3993. During the next months, it is forecast towards ultimate downside at 1.2528 – the alternate scenario otherwise suggests the possibility of bottom building towards the 1.3210+/- area. ###Meanwhile, Sterling has confirmed a higher high at 1.7192 which can be pinpointed by internal fib-price measurements basis the finalising advance from 1.6693. This sets the stage for a reversal signature which, once confirmed, would initiate a substantial counter-trend decline that is projected to ultimate downside at 1.5959 in the months ahead – interim support measures towards 1.6419. US$/Yen has traded lower from Wednesday’s high of 10181 and is thus at risk of a sudden downside acceleration. The short-term picture describes the 10123-10181 range as a running flat sequence which is often followed by violent price moves in the direction of the larger trend. Acceleration lower would thus corroborate ultimate downside towards 9227+/- in the months ahead. 21st July 2014

Financial Updates Bonds

Bonds (Interest Rates)

Despite robust employment data releases of the last several months leading to a logically fundamental expectation that the Federal Reserve would begin an earlier-than-expected rate hike in 2015, long-dated yields have continued lower during last week’s trading. A short-term break below the 2.494% level now extends the corrective expanding flat pattern that began primary wave 4 from last September’s high towards 2.355%. But this is simply the more exact fib. 38.2% retracement level of primary wave 3’s advance from last year’s low than the earlier May low traded at 2.399%. This means that in the short-term, the US10yr yield is expected to edge lower during the next few weeks for this ultimate test to 2.355% prior to staging a reversal upswing to begin primary wave 5 and maintaining our intermediate-term bullish outlook. In Europe, Germany’s DE10yr yield has equally edged lower during last week’s trading but it has now broken below the critical May ’13 low of 1.151% by a couple of bps to last week’s low at 1.132%. This has negated a similar ###five wave uptrend that began equally with the US10yr yield at the July ’12 lows. It means its 30+yr downtrend remains in progress, requiring one additional push to new record lows prior to staging a generational reversal signature that heralds the beginning of a 30+yr uptrend. Our downside projection for the DE10yr yield during the next few months measures its completion towards 0.849%. 21st July 2014

Commodities

The ongoing conflict in Ukraine/Russia with last week’s airline disaster caused precious metals to flip higher from the lows recorded earlier in the week but from an Elliott Wave perspective, the buying resulted in the completion of counter-trend rallies. This proved correct as Friday’s trading pulled levels lower from the previous night’s peak closing near session lows. The gold and silver outlook for the next few months remains bearish although we continue to monitor alternate bullish counts and their respective sensitive price levels. The bearish count for gold depicts a five wave impulse decline unfolding from the March high of 1392.30 with ultimate downside targets during the next few months towards 1096.00+/- . Its five wave subdivision ended minor wave i. one into the April low at 1277.30 and a subsequent counter-trend upswing as minor wave ii. two into last week’s high at 1344.93. Accelerative declines as minor wave iii. three are now engaged and this is generally supported by composite cycles that continue lower into September and from the bullish Elliott Wave outlook for the US$ dollar. The coming week will be important as gold approaches its crossroad at 1272.43+/-. How gold reacts to this level will determine whether ###it continues lower to 1096.00+/- or alternatively, turns higher in measurable fashion to confirm a much higher attempt towards 1475.00+/-. Silver has a similar structure to gold having begun its overall decline from the Feb.’14 high of 22.19. The subsequent decline to 18.79 confirms its downtrend with the subsequent upswing into last week’s highs at 21.60 ending a counter-trend rally. Silver’s rejection to the downside translates into another five wave impulse pattern developing during the next few months towards 17.43. Like gold, silver will test this bearish outlook during the coming week when it declines towards the 20.19-19.96 level. A break below would confirm the ongoing decline towards 17.43 but a reversal upswing would otherwise depict a more bullish outlook with targets towards 25.12. Meanwhile, Crude oil has undergone a deep corrective upswing last week from 99.01 to 103.90 but the prevailing downtrend remains intact from the 107.68 high traded last June. Ultimate downside targets remain unchanged towards 94.41 for the completion of a 2nd wave correction – our medium-term outlook remains bullish. 21st July 2014

LATEST ARTICLES

THE ‘INFLATION-POP’ - PRECIOUS METALS SET TO SURGE INTO RECORD HIGHS

Bloomberg hosted a Precious Metals Forum on 23rd May and WaveTrack International was invited to present our latest Elliott Wave price-forecasts. The event was sponsored by the CME Group and Johnson Matthey.

OUTLOOK & FORECASTS FOR 2013

Highlights:

  • The 2013 outlook for global stock indices and commodities remains very bullish and is entering the last stage of the ‘inflation-pop’ phase that originally began from the post-financial crisis lows of 2008/09
  • This is expected to ignite another period of asset buying that increases risk-on multiples by a minimum 45% per cent and in some cases as much as +300% per cent, sending some global stock indices and commodities into record highs
  • Shorter-term, there is a danger of a downward adjustment of -5-8% per cent, but then sharp price advances to resume
  • Commodity related stock indices and equities are expected to outperform as a sector during the next 12-16 months
  • Banking stocks to participate, but most will not exceed their pre-financial crisis highs

As always, this year’s Outlook & Forecasts for the next twelve months are created applying the Elliott Wave Principle for the assessment of pattern and price amplitude, also Cycle Analysis for the timing of the larger trend reversals. Not always do they jive, but they seldom contradict and more often, provide valuable insights into one or two variations of a similar theme within a seemingly unlimited amount of possibilities.

Even though this report outlines the price expectancy of all asset classes for 2012 it will also illustrate how this coming year fits together into the larger picture. The reasoning behind this is to move away from the 'black-box' stereotype and show you why the results relate to their specific outcome. Overall, this report deals with two different time-periods – long-term and inter-mediate term. Long-term refers to the uptrends from the Great Depression of 1932 onwards and inter-mediate term for the coming year and into 2013.

HOW TO INTERPRET EACH ELLIOTT WAVE CHART

What do you see when looking at an Elliott Wave chart? Just lots of numbers & letters overlaying the price data? – or do you see definable patterns that are immediately familiar? And how do you interpret the results of the analysis and put it into an effective trading plan? Read on and test your own knowledge of these subjects and much more...

A COMMODITY SUPER-CYCLE?

Recent reports of a Commodity Super-Cycle grabbed my attention for two reasons – first, this is diametrically different to the outlook I foresee developing during the next decade, and second, this terminology has surfaced at a time when various commodities have already undergone large percentage gains measured from the Feb.'09 lows

THE 'DEFLATIONARY SCENARIO'

The primary theme of this presentation focuses on a 'Deflationary' outlook, forecast as the dominant aspect continuing during the next decade. This is derived from analysing the Elliott Wave pattern structure of the CRB (Cash) Index during its expansionary period of the last 76 years.

THE 'FLASH CRASH'

The Update Alert! messaging service of EW-Forecast Plus responded to the sharp collapse and the following recovery of US stock indices during the volatile trading session on the 6th May.

OUTLOOK FORECASTS FOR 2011

This analysis centres around the S&P 500 that is used as a proxy for other global indices. The great bull market beginning from the 1932 low ends 68 years later in 2000 - other global indices peaked later in 2007 (75yrs) – some still continuing to progress.

PRODUCTS & SERVICES

EW FORECASTS

Our Flagship Institutional Service updating multiple time-frames across all asset classes...

Live Update FORUM

A unique advisory service that links you 'Live' in a private online meeting room with our analysts...

WTI Alerts

'Register' now and receive the latest EW-Product-Alerts via e-mail with updates for WaveSearch & up-coming tutorials and seminars.

TESTIMONIALS

"I just wanted to congratulate you on the EW-Compass reports launch. I'd say all the work you've all put into this project is well worth it… never cease to be amazed by the harmony that you find between the fib relations you highlight and the Elliott count you propose. You are a true descendant of RNE, and I'm quite sure he'd have really loved to see your work… Another aspect that sets you apart is your deep knowledge of the how and why of pattern relationships between higher & lower degrees of the same price action. So much to learn there". - T.S.

ELLIOTT WAVE PATTERN

INTRODUCTION TO THE WAVE PRINCIPLE

The Wave Principle, often referred to as Elliott Wave is a unique methodology that applies Natures Laws, those encompassing the Natural Sciences and Universal Geometric Philosophies to the financial markets. It allows us to view price fluctuations as an organised process that can be non-linearly extrapolated to gain a glimpse into the future direction of trends, counter-trends and amplitudes on any market or contract traded around the world.

Expanding Diagonal Patterns - Do they actually exist? - Elliott's inclusion of the Contracting Diagonal

In R.N.Elliott's original treatise of "The Wave Principle (1938)", he introduces us to diagonal patterns for the first time on page 21. Under the heading, Triangles, Elliott describes the difference between horizontal triangles that represent hesitation within an ongoing, progressive trend and diagonal triangles that form the concluding 5th wave of a larger five wave sequence.

NEWS & EVENTS

Tradersworld Online Expo #12 – Starts 12th November 2012

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 12th Trader Expo held online for 7 weeks starting on 12th November 2012 and ending in the new year on 6th January 2013. Peter’s presentation is entitled “Elliott Wave Price Forecasts & Cycle Projections – Three Phases of the 18 Year Bear Market ~ ‘Shock–Pop–Drop’” for more information visit http://tradersworldonlineexpo.com/

Announcement: 123rd Battery Council & Trade Fair Convention in Miami, 1-4 May 2011

Peter Goodburn will be presenting his latest Elliott Wave analysis at the 123rd Trade Fair Convention of the Battery Council in Miami, 1-4 May 2011. Peter’s presentation is entitled "The Historical Price Trend of Lead and Applying the Elliott Wave Principle to plot its course into the Future".

ELLIOTT WAVE PRICE-FORECAST UPDATES